Fiat Chrysler & Peugeot Merger Agreed at $50bn
Board members of the two motor vehicle firms have finally agreed on a merger deal at $50 billion, becoming fourth largest car manufacturing company in the world.
Fiat Chrysler (FCA) and Peugeot-owner PSA have officially signed the papers to join via a binding agreement for a 50/50 merger of stock. PSA shareholders are set to receive 1.742 shares in the new and merged company, for each PSA share they already own. Vice versa, each FCA shareholder will receive 1 share of the new firm, for each FCA share they already hold.
The deal will conclude in around 15 months, creating a joint firm estimated at €170 billion in sales per year, or 8.7 million vehicles sold each year. As a consequence of the deal being struck, shares in PSA have risen 1.5% in Paris, whilst FCA stocks rose 0.3% in Milan.
A joint statement clarified that this deal will allow both firms to “address the challenge of shaping the new era of sustainable mobility,” whilst saving the companies around €3.7bn a year.
“Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with world-class products, technology, and services,” Carlos Tavares, chairman of Peugeot-maker PSA, said in the joint statement.
Moving forward, Tavares will take up the role as CEO of the merged company for the next five years, taking a seat on the board.